5 Growth Stocks To Buy As U.S.-China Trade Tiff Eases
Zacks Investment Research | Nov 25, 2019 08:24PM ET
The protracted trade war between the United States and China finally seems to be easing. After imposing higher rounds of tariffs on each other, both countries had agreed on a phase one deal in October. But, geopolitical tensions like the pro-democracy protest in Hong Kong and U.S. Congress’ bill to support protestors in Hong Kong kept trade deal uncertainties looming.
However, positive developments over the weekend have induced fresh hopes on the phase one deal completion,helping the stock market gain traction.
U.S. –China to Reach Phase One Trade Deal Soon
In the beginning of October, both the United States and China had agreed to sign a phase one trade deal soon. This news, along with the United States halting tariff hike on Oct 15 and China agreeing to buy more agricultural produce, kindled hopes for investors. Since then, every other day, certain news either spooked markets or gave fresh hopes.
However, the U.S. administration has scheduled a tariff hike on Dec 15, which will be imposed if the deal makes no progress. Additionally, the U.S. Senate and House had passed a bill to protect human rights in Hong Kong on Nov 20, and that instantly made China condemn the United States for interfering in their domestic affairs.
Despite the foresaid events, China’s chief trade negotiator, Liu He has invited the U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing for trade negotiation. Further, the U.S. national security advisor Robert O’Brien on Nov 23 said that the phase one deal “could happen” by the end of this year.
The Chinese administration reported that they will raise penalties on violations of intellectual property rights. This has been one of the sticking points in the U.S.-China trade talks and the latter is making an attempt to address the issue.
Along with these positive developments over the weekend, China’s Ministry of Commerce said that the United States and China held a telephone conversation on Nov 26, wherein Liu He and Robert Lighthizer along with Steven Mnuchin discussed how to address respective concerns and reach terms of agreement. Both countries’ representatives agreed to make further communication on matters related to the phase one trade negotiations.
Our Top Picks
Companies with exposure to the Chinese economy, either for sales or purchase of goods or finished products, have been affected by the higher and retaliatory tariffs. Given the positive developments and possibilities of a phase one deal before the year ends, we have shortlisted five stocks that are poised to gain as the trade war eases. These stocks flaunt a Zacks Rank #1(Strong Buy) and Zacks Investment Research
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